Indonesian Minister Luhut Says High Nickel Prices Could Harm Economy

TEMPO.CO, Jakarta - Indonesian Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, expressed concern over the nickel prices. He assessed that if nickel prices rise too high, it will be very detrimental to the economy.

“Too high nickel prices are very dangerous. We learned from the cobalt case three years ago when the price was so high and people ended up looking for other forms of batteries. This is one of the triggers for the emergence of lithium ferro phosphate (LFP),” Luhut said in a video posted on his Instagram account @luhut.pandjaitan, as quoted on Thursday, January 25.

Therefore, Luhut estimated that if nickel prices rise too high, the electric battery industry will look for other alternatives. “The technology is developing very fast,” he added.

According to him, nickel-based lithium batteries can be recycled, unlike LFP. “But once again, technology is evolving. We are grateful that we are developing LFP with China, we are also developing lithium batteries with China and others.”

Luhut responded to criticism of falling nickel prices by arguing that the public should look at the trend of nickel prices over the past decade.

“The cycle of commodity prices goes up and down, whether it's coal, nickel, tin, gold, or others. But if we look at the last ten years, the [average] global nickel price has been at US$15,000 [per ton]. Even in 2014-2019, when we did the downstream program, the average nickel price was only US$12,000 [per ton],” he said.

Indonesia holds the largest nickel reserves in the world. Luhut believed the government’s downstream program benefited the country’s economy.

“[Thanks to] the downstream program, we can maintain economic growth at five percent amid the current global economic conditions, and we are still trying to achieve over five percent, maybe six percent next year,” Luhut said optimistically.

ANTARA

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